Shares of data storage company Pure Storage traded lower Friday despite positive takeaways from analysts following a presentation late Thursday. The dip for Pure Storage stock comes as big names in data-center hardware like Nvidia and Micron Technology also are under pressure.
Analyst commentary was largely positive following the Pure Storage event, which capped off a company showcase in Las Vegas. While Pure Storage did not provide updated financial targets, Guggenheim analyst Howard Ma said that was largely expected. The company instead detailed a series of product upgrades within its broader platform for data storage, powered by its flash-storage hardware.
"We have one operating environment that covers the full range of data storage needs for our customers," Pure Storage Chief Executive Charles Giancarlo told analysts Thursday, according to a FactSet transcript.
Pure Storage also teased a hyperscaler data center design win to be announced later this year. Hyperscalers are the tech giants that require computing power on a massive scale, such as Amazon and Microsoft. Another hyperscaler, Facebook parent company Meta Platforms, is already a Pure Storage client.
"We believe it is Pure's software prowess that underpins its potential to become a key storage supplier to hyperscalers and preferred architecture for AI workloads, both opportunities that we have
said are likely in the billions," Ma wrote to clients early Friday. Guggenheim rates Pure Storage as a buy.
In midday trading on the stock market today, Pure Storage stock declined 2.2% to 64.53. On Tuesday, Pure Storage stock notched an all-time high of 70.41.
Pure Storage Stock On IBD 50 List
Pure Storage stock has gained 80% from the start of the year. Shares broke out of a double-bottom base at a buy point of 55.09 in mid-May, according to IBD MarketSurge charts.
Improving sales growth and earnings have helped the stock. Analysts also expect it to benefit from the increased data needs driven by generative artificial intelligence.
Also, 73% of the 22 analysts tracking Pure Storage stock have a positive view, according to FactSet.
William Blair analysts are on that list, rating Pure Storage stock as outperform. William Blair analyst Jason Ader said Friday Pure Storage's management "laid out its vision for the next era of data storage that centers on operational simplicity," at this week's conference.
"With a long runway for Pure to continue taking share in enterprise, capitalize on new avenues of growth with hyperscalers and AI use-cases, and steadily improve its profitability, we reiterate our outperform rating," Ader wrote to clients.
Meanwhile, Susquehanna Financial Group analysts raised their price target for Pure Storage to 80 from 75. The analysts reiterated a positive rating.
"The hyperscaler opportunity represents a large sticky opportunity for PSTG, which is likely to start to materialize later this year," Susquehanna analyst Mehdi Hosseini said in a client note.
Pure Storage is part of IBD 50 stock list. It also is included in the Big Cap 20 and IBD Tech Leaders lists.
